Exam 11: Corporations: Organization, Stock Transactions, and Stockholders Equity

Common Stock Dividends Distributable is shown within the Paid-in Capital subdivision of the stockholders' equity section of the balance sheet.

Land Inc. has retained earnings of $800,000 and total stockholders' equity of $2,000,000. It has 300,000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Land declares a 10% stock dividend on its common stock:

Preferred stockholders generally do not have the right to vote for the board of directors.

The following information is available for Gaynor Corporation: Instructions Based on the preceding information, calculate return on common stockholders' equity.

A dividend based on paid-in capital is termed a liquidating dividend.

The cost of a noncash asset acquired in exchange for common stock should be either the fair value of the consideration given up or the consideration received, whichever is more clearly determinable.

Which of the following would not be true of a privately held corporation?

Prepare the necessary journal entry for each of the following transactions for Zenia Corporation. (a) Issued 2,000 shares of its $5 par value common stock for $20 per share. (b) Issued 5,000 shares of its stock for land advertised for sale at $90,000. Zenia's stock is actively traded at a market price of $16 per share.

Moore, Inc. had 250,000 shares of common stock outstanding before a stock split occurred, and 1,000,000 shares outstanding after the stock split. The stock split was

Which of the following statements about dividends is not accurate?

A retained earnings statement shows the same information as a corporation income statement.

On December 31, 2018, Stock, Inc. has 4,000 shares of 6% $100 par value cumulative preferred stock and 60,000 shares of $10 par value common stock outstanding. On December 31, 2018, the directors declare a $20,000 cash dividend. The entry to record the declaration of the dividend would include:

Book value per share is computed by dividing total

The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.

Wise Company had the following transactions. 1. Issued 7,000 shares of common stock with a stated value of $10 for $130,000. 2. Issued 2,000 shares of $100 par preferred stock at $108 for cash. Instructions Prepare the journal entries to record the above stock transactions.

A company would not acquire treasury stock

Stockton Corporation has 160,000 shares of $5 par value common stock outstanding. It declared a 15% stock dividend on June 1 when the market price per share was $13. The shares were issued on June 30. Instructions Prepare the necessary entries for the declaration and distribution of the stock dividend.

Dividends in arrears on cumulative preferred stock are considered a liability.

Retained earnings are occasionally restricted

Trane Corporation has the following stockholders' equity accounts: Preferred Stock Paid-in Capital in Excess of Par-Preferred Stock Common Stock Paid-in Capital in Excess of Stated Value-Common Stock Paid-in Capital from Treasury Stock-Common Retained Earnings Treasury Stock-Common Instructions Classify each account using the following tabular alignment.